Federal Reservations

WASHINGTON (Reuters) - The Federal Reserve proposed on Tuesday new capital and liquidity rules for the largest banks that would roll out in two phases and not likely go further than international standards.

Originally from Reuters: Business News

WASHINGTON (MarketWatch) - The Federal Reserve on Tuesday released a package of post-crisis proposals detailing new tougher rules for big banks, including a measure that would limit a large financial institution's credit exposure to other large banks. The central bank said it would implement an aspect of a global agreement on bank capital, known as Basel III, named after the city in Switzerland where past agreements have been formed. However, the central bank said it would release a proposal later providing the details of how it would do so. The agency proposed new stringent rules on transactions between big banks, exposing them to possible leverage prohibitions and sets forth a series of new punishments for violators. The regulations would impact the largest U.S. banks including Bank of America Corp. , Citigroup Inc. and J.P. Morgan Chase & Co. . Based on the proposal, a large designated bank with more than $500 billion in assets is prohibited from having a credit exposure of more than 10% of its stock and surplus with a counterparty bank that also has more than $500 billion in assets.

Originally from MarketWatch

he Federal Reserve is expected as soon as later this week to release a proposal that would reflect a global agreement on bank capital, according to analysts.

Originally from MarketWatch

The campaign to "move your money" has gotten a groundswell of support. Having greater impact would be to "move our money" -- move our local government revenues out of Wall Street banks into our own publicly-owned banks. Occupy Wall Street has been both criticized and applauded for not endorsing any official platform.  But there are unofficial platforms, including one titled the 99% Declaration which calls for a "National General Assembly" to convene on July 4, 2012 in Philadelphia.  The 99% Declaration seeks everything from reining in the corporate state to ending the Fed to eliminating censorship of the Internet.  But none of these demands seems to go to the heart of what prompted Occupiers to camp out on Wall Street in the first place – a corrupt banking system that serves the 1% at the expense of the 99%.  To redress that, we need a banking system that serves the 99%. 

Originally from The Market Oracle

WASHINGTON (MarketWatch) - Bank regulators on Wednesday voted to introduce a proposal that would require that the biggest banks use three alternative analysis approaches to the use of credit ratings for evaluating how much capital they need to hold in their trading books to offset risks with investments in securitizations and debt. The proposal was introduced by the Federal Deposit Insurance Corp., Federal Reserve and Office of the Comptroller of the Currency. An FDIC official said that the new risk weight proposals would create a significant increase in capital charges that meet new hikes in capital required by new international Basel III requirements. Institutions with positions that were deeply downgraded during the financial crisis of 2008 would be required to hold particularly high capital, he added.

Originally from MarketWatch

WASHINGTON (MarketWatch) - The current threats to financial stability are occurring while the transition to a stronger bank capital and liquidity regime is underway but not complete, the former number-two official at the Federal Reserve said Friday. "Surely the solution is to require high levels of capital and liquidity before trouble hits," said Donald Kohn, a former vice chairman of the Fed who sits of the Bank of England's Financial Policy Committee. "Unfortunately the current threats to financial stability are occurring while the transition to this stronger [capital] regime is underway but not yet complete." Until September, 2010, Kohn was vice chairman of the Fed and spent 40 years at the central bank.

Originally from MarketWatch

The Federal Reserve, Bank of Canada, Bank of England, the Bank of Japan, the European Central Bank, and Swiss National Bank announced coordinated actions to provide liquidity support to the global financial system. Today’s announcement involves a reduction in cost at which banks in foreign countries can borrow dollars from their central banks. The central banks lowered the price on the existing temporary U.S. dollar liquidity swap line by 50 basis points such that the new rate will be U.S. dollar over night indexed swap (OIS) rate plus 50 bps instead of U.S. dollar OIS rate plus 100 bps. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice. This arrangement will be effective as of December 5, 2011 and will remain in place until February 1, 2013.

Originally from The Market Oracle

The coordinated actions by the Federal Reserve and other central banks is aimed at the funding strains faced by European banks in what was becoming a modern day run on the banks.

Originally from All News, Video and Posts related to TOPIC: Federal Reserve

The Federal Reserve announced on Wednesday that Michael Gibson will be the new head of its bank supervision division.

Originally from All News, Video and Posts related to TOPIC: Federal Reserve

NEW YORK (MarketWatch) -- U.S. stocks rallied Wednesday after the Federal Reserve and five other central banks together moved to ease the flow of funds to banks hit by Europe's debt crisis and China cut the level of cash that banks have to set aside as reserves. The Dow Jones Industrial Average rose 333.01 points to 11,888.64. The S&P 500 Index climbed 37.46 points to 1,232.65, with industrials leading the gains that extended to all of its 10 industry groups. The Nasdaq Composite rose 74.30 points to 2,590.81.

Originally from MarketWatch